On Wednesday, the GBP/USD pair initially drifted back closer to weekly lows but was saved by another round of weakness in the US Dollar. Stronger US CPI-led modest USD uptick quickly ran out of steam and prompted some aggressive short-covering move around the major, which surged over 200-pips from intraday lows to move back above the key 1.40 psychological mark. The pair held with modest gains for the fourth consecutive session on Thursday and was now seen consolidating overnight strong gains.
In absence of any major market moving economic releases from the UK, the pair remains at the mercy of broader market sentiment surrounding the greenback, which seems all set to resume with its broad-based downtrend. Later during the early NA session, second-tier US economic data seems unlikely to change the near-term course but might still provide some short-term trading impetus.
Wednesday's strong up-move helped the pair to decisively break through a short-term descending trend-line resistance. Hence, a follow-through buying interest beyond 1.4035 immediate hurdle is likely to assist the pair to build on its strength and head back towards reclaiming the 1.4100 handle before eventually darting towards its next major hurdle near the 1.4140 region.
On the flip side, any meaningful retracement back below the 1.40 handle seems to find support near the 1.3965 horizontal level, which if broken could prompt some additional profit-taking slide. Any subsequent weakness is likely to find some fresh buying interest near the 1.3900 round figure mark, which should now limit any further downside, at least for the time being.
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